Pea and thimble tricks look like open, transparent exercises when compared with the way governments have traditionally funded the Australian car industry.

Politicians love to be seen to be ''supporting Aussie jobs'', especially when they're Aussie jobs making Holden cars.

But they are much less keen on pointy heads doing the maths that calculates how much taxpayers are spending per job, or per car, propping up the industry. (The last time the Productivity Commission did it, it was about $2800 a car, although that figure was hotly disputed).

Australia's own Prime Minister ... Julia Gillard, like Ben Chifley in 1948, poses with the first Holden off the assembly line. Photo: Andrew Meares

They are also less keen on admitting, out loud, that there's effectively an international auction where governments bid to get car makers to operate in their countries, and that if they don't pay, we don't get to make cars. In other words, the payments are pretty much permanent.

Advertisement

True to form, Julia Gillard and her ministers didn't tell us yesterday over what period the $215 million in federal money would be paid to Holden, when it would start, or exactly which pot of money it would come from.

But the budget papers show we are spending $511 million this year on car industry assistance, and about the same seems to have been promised for each of the next four years.

Ben Chifley in 1948.

We also don't know exactly how much each of the three makers get, but estimates put total annual payments at between $200 million and $250 million. Add the $200 million or so that goes to component makers, top that with however much extra Holden will get after yesterday's announcement (likely to start well before the new models begin production) and the current appropriation is pretty much spent.

It seems the reason there was some extra cash sloshing around to pull out of the hat for Holden is because the main payment is linked to actual production, which has been down.

All of which is bad news for Tony Abbott. He says, not unreasonably, that he needs more information.

But it seems now highly unlikely he will be able to go through with his plan to cut $500 million from the car fund over the next four years, and possibly another billion dollars after 2015, and also keep his promise to save car making and blue-collar jobs. Especially when the deal with Holden is sealed in the form of a contract.

41 comments

I would much prefer to see industry support then slashing $70 billion out of the economy to bring in a surplus. Where would the jobs be available then?

Tony Abbott has again displayed with his comments over the last week about Margaret Whitlam and the targets on Gillard's and Alabenese's heads that he lacks judgement. To allow this man to be PM would be the biggest mistake we would have made for Australian democracy. He and his flaky team believe they will get into govt by doing nothing. I would like to see a govt that at least has some vision for the future, to transition to the digital economy, to tackle climate change, spend on education and infrastructure, hospitals and an aging population to name just a few. Where are these ideas from the LNP? I don't think they have any idea.

Commenter

n720ute

Location

North Coast NSW

Date and time

March 23, 2012, 9:23AM

@Steveh Well steve I suppose " you dont need to tell the whole truth" Unless of course you" write it down " !!!!

Commenter

stevec

Location

five dock

Date and time

March 23, 2012, 9:31AM

"By hook or by crook the PM is holdin' on"

Oh god I hope Trasher Abbott is too.

Please Liberal Party I know I have been begging you to dump Trasher Abbott but now I am asking you to keep him there and let him have an outstanding career as Opposition Leader of the Liberal Party.

Commenter

J. Fraser

Location

Queensland

Date and time

March 23, 2012, 10:09AM

Go easy on exclamation points steve, you're begining to look like my favourite Balmain boy Lesm. You know once apon a time they weren't suppose to cry, now with gentrification you can't shut them up.

Commenter

SteveH.

Date and time

March 23, 2012, 10:17AM

SteveH is up early again but still has nothing to say.

Why doesn't Tony Abbott come out and nail his colours to the mast and say he doesn't support the local car industry?

The Liberals support tax cuts but vote against them; they support the car industry but oppose assistance; they're concerned about climate-change but oppose action.See a pattern here?

Hypocrisy thy name is the Liberal Party. The coalition stooge army is out criticizing anything the government does without a hint of irony or consistency.

Commenter

Think Big

Location

Sydney

Date and time

March 23, 2012, 10:27AM

@Think SpinAnd as usual you don't address the issue but deflect toward either or both of your daily targets ... Tony Abbott and the Media ... depending on which side of the coin came up when you tossed it this morning. You are the master of deflection ... quick bolt up to Qld and join the Silver Bodgie and Cap'n Bligh as they join the ever growing Labor sinkings, they need someone of your obvious calibre.

Commenter

Hasbeen

Location

Umina

Date and time

March 23, 2012, 11:13AM

SteveH, and what's Tony's spin doctors mantra re telling the truth whole truth specifically as to where he's going to find the cuts to cover his $70B black hole - or is the whole truth getting Joe Hockey to spout we;ve found the savings?

People in glass houses......

Commenter

Brendan

Location

Sydney

Date and time

March 23, 2012, 11:24AM

Lets face it GMH and the PM have much in common: both on life support and borrowed time. But my bet is on Holden to outlast this PM.

23 Mar
A PLEDGE of $275 million in federal and state funding has convinced Holden to stay in Australia for another 10 years and produce two new cars but has also reignited debate about industry assistance.

23 Mar
The Gillard government's decision was obvious: you can't have a car industry without taxpayer subsidies. Holden is an Australian icon, with its Adelaide plant producing two of the four biggest-selling cars in the nation.